Recent Buy – Genuine Parts Company (GPC)
It has been awhile since I have posted a Recent Buy article. Despite not making any big purchases in awhile I have still been watching the market. I have actually had my eye on Genuine Parts for some time. Back around August when I started watching the company the stock sold in the low to mid $80 range. Unfortunately, I was not able to pull the trigger in time and I watched the stock run all the way up into the mid to high $90 range.
Knowing that I had missed my chance, I no longer wanted to pay the extra premium to acquire the shares in the upper $90s. So I just decided to wait for another time. Fortunately, I didn’t have to wait for very long. Just a few weeks later despite announcing 2 new acquisitions, Genuine Parts reported earnings that didn’t meet analysts expectations so the company stock began to really take a dip. So I decided that now was another opportunity to acquire a good company at a fair price.
This time I was ready to pull the trigger and to add 6 shares of Genuine Parts to my portfolio. At the time I added these shares, I was able to get them at a cost basis of $545.84 which works out to be an average price of $90.97 per share. Adding these 6 shares will add $4.05 to my quarterly dividend. This will also add a total of $16.20 to my projected annual dividend income.
A lot of my thinking on Genuine Parts has been brewing inside of me for some time. I originally got turned on to the company because I started researching Motion Industries which is a great company who operates in the supply of industrial parts. Once I found out that their parent company had paid an increasing dividend for 51 years I was very interested to learn more about the company. As it turns out, Genuine Parts is also the parent company of Napa Auto Parts, who operates in a sector that has seen a lot of down trending lately. Despite this, Napa is still a well run company who just happens to be operating in a struggling sector right now. Nevertheless both companies can excel by using their widespread distribution network to continue to create growth.
With two great companies both under the umbrella of Genuine Parts it is apparent why they will be able to continue to grow their dividend while also trying to increase shareholder value through acquisitions.
Despite being happy with my Recent Buy, I am very aware of the fact that the sector trend may push the share price of the company down even lower. So for now I will continue to hold my position. If the share price continues to be below my cost basis, I will consider the option to add to this position at that time.
All of the changes have been updated on the Portfolio page as well as the Dividend Income page.
I am very intrigued to hear what your thoughts are on my recent purchase!
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As always I look forward to reading all of your comments and questions, until then….. happy investing!
-Jason from MoreDividends.com
Very nice pickup. I recently took a hard look at GPC and liked what I was seeing. The European acquisition should be great in the long run and set the company up for some long term growth. Plus, now that the yield is over 3% the company is looking pretty nice.
Dividend Diplomats recently posted…Bert’s October Dividend Income Summary
Yeah, I totally agree. I am hoping to be able to add more to this position. Thanks for stopping by.